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Price Index (FPI) Monthly Snapshot - June 2018 CGA Prestige Foodservice Your source for accurate data, analysis and insights into today’s food prices.
Price Index (FPI)Monthly Snapshot - June 2018
CGA Prestige Foodservice
Your source for accurate data, analysis and insights into today’s food prices.
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To receive the full volumetric data, detailed category and subcategory performance and a more in-depth analysis, please [email protected] or [email protected] to purchase.To receive the full volumetric data, detailed category and subcategory performance and a more in-depth analysis, please [email protected] or [email protected] to purchase.
CGA-Prestige FPI Report - June 2018
CGA Prestige Foodservice Price Index (FPI) - Monthly Snapshot
Executive Summary Fish has reached a new high of 136.9 this month, pushing inflation
to 23.8% and further demonstrating the high volatility of this category.
Salmon prices reached a peak for the current year at the start of May
and catches of both cod & haddock were poor. High salmon pricing
has been driven by both strong demand, especially in the US, and the
increasing price of crude oil which has a correlation to the value of the
Norwegian Krone, a key trading currency for salmon. Adding to the
troubles in this sector, the International Council for the Exploration
of the Sea (ICES) have recently recommended a reduction of quotas
for cod and haddock by 13% and 25% respectively in the Barents
Sea. This stretch of water between Norway and Russia is the world’s
largest source of the two species and if the countries follow these
recommendations supply will drop significantly. Recent catches have
already been smaller than expected, so prices for these national
favourites should remain firm for the near future.
In the Dairy category, butter prices have risen sharply, and fear is
growing of a repeat of last year’s butter crisis. Whilst milk production
has increased since last year growth has been slowing and is forecast
lower than initially expected. The category jumped 11% this month
from April, but this is partly due to seasonal trends as a similar jump was
seen last year, however the behaviour is slightly deflationary year-on-
year. We have previously reported on farmgate milk price increases and
some sources now suggest we could hit 30ppl in the next few months
despite current average pricing at 27.4ppl.
Oils & Fats continues to make headlines with inflation remaining at
nearly 30%. We have seen the index of this category increase since the
beginning of the year, however, there are several factors that indicate
that prices could ease soon. June saw an announcement from OPEC+
that total crude output will be increased by 1 million barrels per day,
returning to supply levels similar to last year. Oilseed prices have also
fallen as US farmers tried to find alternative markets for their soybean
exports following retaliatory measures from China who increased their
import tariffs on the crop. A lack of alternative buyers, combined with
optimal weather, resulted in US market prices falling several percent.
The effect on Europe was weakened by currency movements in the
Dollar, but we may start to see the Oils & Fats category fall due to
continued oversupply in the US. Once autumn arrives this may reverse
as China starts to purchase more soybean from Russia & the Baltic,
traditionally Europe’s source for soybeans, reducing availability and
pushing prices up.
In other categories, Sugars, Jams & Syrups are continuing their
deflationary trend, however India, the second largest producer, has
recently implemented minimum pricing to combat current market
flooding. Brazil’s largest sugar processor is also keen to increase ethanol
production until prices on ground sugar rise back up to profitable levels.
Finally, the Ambient Hot Beverages category sees Ghana & the Ivory
Coast planning to coordinate on production, processing & pricing of
cocoa beans in hopes of receiving more of the value associated with
chocolate production. There is a real possibility of them becoming
the OPEC of cocoa as the organisation only controls 40% of global oil
production, while the two countries control 60% between them.
This month sees the Foodservice Price Index reach its highest point since publication began. One of the main drivers this month was Fish which saw
a 14.3% month on month increase. The Dairy category also experienced a large month on month swing which is partly due to seasonality. Oils & Fats
increased in May due to poor rapeseed growth and high crude oil prices, but the price of soybeans has begun to fall following the introduction of
Chinese tariffs on US crop.
Prestige Purchasing are a leading expert in Value Chain. We provide knowledge, insight, and practical support to hospitality and foodservice businesses. We improve pro�tability by improving the way in which our clients source and manage what they sell. Our services are tailored to allow us to assist businesses of any scale in the sector. O�ering a bespoke consultancy based model we o�er services contextualised in the statements below for our clients. Supply OptimisationFor growing businesses that have not yet established a mature supply chain function we provide outsourced services that deliver pro�t improvement through the application of best in class techniques, using our team of experienced and capable buyers.
Procurement TransformationFor established businesses that have yet to establish “strategic procurement” and wish to introduce national, regional or global supply arrangements, often establishing their own team to develop and maintain them. Procurement Support ServicesA portfolio of services to support fully established procurement and supply chain teams in their mission to add value to their organisation. Services include Insight, Training, Analytics and Benchmarking. Our services are 100% Transparent FIXED fee based and deliver between 2 and 7 times return on investment all backed up with �nancial guarantees. We do not aggregate volume with other operators and build each project or service bespoke for each of our clients’ needs delivering the maximum bene�t to our clients bottom line.
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